TWO RALEY'S BATH UNITS BRING IN HIGH MARGINS

MICHAEL SLEZAK

SACRAMENTO, Calif., -- Bath boutiques that feature a broad mix of higher-priced products are generating margins in the 50% range at two Raley's stores.

The bath shops -- containing an inventory mix of bath gels, beads, crystals, body lotions, bath trial sizes, aroma therapy products, body and nail brushes, and gift sets -- went into stores in Elk Grove and Woodland, Calif., several months ago.

With the opening of these new departments Raley's, based here, hopes to cash in on the popularity and interest in the fragrance, bath and body category that has spawned such specialty retailers as Goodebodies, Bath & Body Works and H2O Plus.

According to one source, such specialty retailers can make as much as 80% to 90% margins on some high-end items.

At Raley's Elk Grove location a manager who wished to remain anonymous said, "While we're generally comfortable with 35% or 40% in cosmetics, these [bath and body products] lend us 10 or 15 points more, and we're still 20% less than a boutique [specialty retailer] selling the same kind of items."

The installations were built imaginatively by store personnel, who used such unusual materials as weathered barn wood, tomato lugs -- 18-inch-long wooden boxes -- and decorative vines to fixture the department.

Commenting on the boutique, Bill Roatch, cosmetic buyer for all Raley's stores, said: "From talking to the managers, [the response] has been very good. It really creates, in those particular locations, a special look to the cosmetics department."

Roatch didn't rule out the possibility that other bath boutiques might go into Raley's stores. He said Raley's hasn't "rolled out anything chainwide, but we've been looking at some options to

roll it out as far as the fixturing."

Most Raley's stores are experimenting with the concept and much depends on a store's market demographics, Roatch added.

The stores "are trying to find their niche," he said. "Chainwide what we've noticed is that in some areas bath [products] do extremely well, some [stores] do really well in the upscale [lines], some do a little better in the low-end [merchandise], and some stores can't sell bath products at all."

Most Raley's stores carry Calgon and Vaseline Intensive Care bath beads, products that have "been around forever," Roatch said. Many stores, however, have introduced the higher-end Sarah Michaels brand of bath products, he said. Only a handful of stores have created their own boutiques or little upscale bath sections, such as those found at the Elk Grove and Woodland stores.

In the Woodland store, Roatch said drug store manager Lee Bakken used wood from a dilapidated barn and purchased tomato lugs from local vegetable growers to create a unique wooden pantry look for the bath shop there.

The Woodland bath shop is 20-feet long, with a 54-inch high counter and a 7-foot overhead structure. Products are displayed in authentic and weathered tomato lugs, which local tomato pickers use to hold tomatoes.

The Woodland bath shop is located directly across from the in-line bath and lotion counter, directly in the middle of the cosmetics department.

"The reaction is excellent. The products are selling, and just the display itself is attracting attention. Both men and women are shopping the counter," said a source at the store who did not wish to be named. "We've actually had people bring their friends in just to look at the display area," said the source.

The bath shop fixture at the Elk Grove store is 24-feet long and 72-inches high. It is located in the cosmetics department in the center of the store.

The wood structure is a flat wall fixture with individual wooden shelves, ranging from 6-to 12-inches in length. Staggered shelves and decorative vines add to the boutique's mystique along with about 20 baskets that are angled up to catch customer attention. The baskets are positioned along the bottom of the fixture. These baskets can be equipped with 6- or 12-inch inserts for inventory control and are filled with loose soaps, loofahs and trial-size items.

"New homes are equipped with such massive bathrooms that the bathroom is becoming more than just a place to go take a shower," said the Elk Grove store source. "It's a place to relax. It's a romantic place."

The source added customers are "elated" by the bath shop fixture, but "it's not just a pretty fixture that everyone likes, it's a pretty fixture that everyone likes that's moving a ton of product."

Many grocery-store cosmetic areas don't smell like cosmetics areas, said the source, but the Elk Grove fixture has changed that.

"In a grocery store, maybe your department doesn't smell the way it should. It might smell like the bakery or the meat department. Or they might be roasting chickens in the store," the source said. "This fixture makes the whole cosmetics department smell like a cosmetics department. A wonderful smell comes off it all the time."

The bottom line is the bath shop is a success, he said. "The margins are lucrative and you still give a substantial savings to the consumer."